IBM drags on Dow; U.S. stocks mostly rise

Dow logs second straight day of losses

NEW YORK (MarketWatch) — U.S. stocks closed mostly higher on Wednesday after trading in a narrow range for the bulk of the session. Markets shrugged off largely disappointing earnings, but results from IBM weighed on the blue chips.

The S&P 500
SPX, -0.88%
was up 1.06 points at 1,844.86. The Dow Jones Industrial Average
DJIA, -1.11%
fell 41.10 points, or 0.3%, to 16,373.34, falling for the second day in a row. The Nasdaq Composite
COMP, -0.94%
was the best performing index, gaining 17.24 points, or 0.4%, to 4,243.00, its highest level since July 17, 2000. The tech-heavy index gained in five out of last six trading days and is the only measure with year-to-date gains

Discuss key earnings announcements before and after results come in. Learn more

Disappointing results from IBM, the second-highest-priced Dow component, weighed on blue chips. Shares of IBM
IBM, -1.33%
skidded 3.3% after the company reported fourth-quarter revenue that fell short of estimates and disappointed with its earnings outlook.

Coach Inc.,
COH, -0.38%
the biggest decliner on the S&P 500, saw its shares slump 6% after the company said second-quarter sales fell 6%. Coach said its North America performance continues to disappoint.

“Earnings have been mildly disappointing, and the reason we aren't seeing a more pronounced selloff is because investors went in to the season with low expectations. The last quarter of 2013 was affected by the government shutdown, tough weather, fewer holiday shopping days, all of which led companies to lower their outlooks,” said Jim Russell, senior equity strategist for U.S. Bank Wealth Management.

AFP/Getty Images

IBM shares fall on weak forecast.

“At this point, investors are overlooking the fourth-quarter earnings, because they are focused on this year’s profits and the pictures is more encouraging. Companies are hiring more, capital expenditures are expected to rise and we are seeing more M&A activity. This year, markets will be more earnings driven than valuations driven,” he added.

VMware
VMW, -1.17%
shares rose 1.2% after the software company said it would buy AirWatch for about $1.54 billion. The firm also announced its fourth-quarter revenue estimates at the high end of its previous outlook.

Shares in U.S. Bancorp
USB, -0.27%
fell 0.3% after the bank reported a modest rise in profit thanks to lower tax costs and credit-loss provisions, but said revenues sank due to a decline in refinancing activity.

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